Who would win in a rap battle, Adolf Hitler or Darth Vader? Maybe that question hasn’t exactly been gnawing at you, but in the cutthroat emerging market of Internet entertainment, writers, actors, and producers innovate tirelessly to get your attention.

One of the strangest commercial successes to rise from this crucible is the Epic Rap Battles of History, a YouTube musical-comedy series that now has more than 1.8 million subscribers. That’s a block of loyal fans that most TV stations would kill for.

Before hitting on success, the series creators, Lloyd Ahlquist and Peter Shukoff, each struggled for a decade in live comedy, doing cheap shows in cheap clubs anywhere they could. In 2010, Shukoff branched out into online videos, but few people even noticed his uninspired YouTube sketches and songs.

Finally, after a disappointing improvisational theater session in 2010, the two comics hit on an idea that consumers actually liked: the Epic Rap Battles of History.

Shukoff and Ahlquist made a couple of 2-minute rap-battle videos, and the viewers suddenly flocked to them in the millions. The advertisers followed. And fast as they could, the investors rolled in to support and improve the product with capital goods (like green-screen studios and closets full of wigs.)

Today, Shukoff and Ahlquist are the star talent in a booming new entertainment company; they’ve created 25 wildly successful epic rap battles of history; and they are making good money by doing what they love. That’s the power of the market.

The Breakout Hit

The video that made them famous (it’s now at 65 million views) begins with Ahlquist standing rigidly in brown coat and mustache, shrieking out,

I am Adolf Hitler!

Commander of ze Third Reich.

Little known fact:

Also dope on ze mic!

Everyone hates Hitler. And everyone loves a good Hitler parody. So making him declare that he is a master rapper ("dope on ze mic") is funny enough for the first 20 seconds.

But this is an epic rap “battle.” Hitler needs an opponent. Who can be villainous enough for the job? Sure, there’s Chairman Mao, Pol Pot, and Joseph Stalin, but to the vast majority of history-illiterate viewers today, those mass-murdering criminals just aren’t recognizable figures.

As much as he deserves it, a Joseph Stalin parody can’t get a million hits on YouTube. In fact, of the top five YouTube videos for the search term "Stalin Parody," four are actually Hitler parodies that guest-star Stalin.

That leaves only one figure in all the stories of modern Western culture prominent and powerful and absolutely evil enough to match Hitler.

It is, of course, Darth Vader.

He appears in his glossy black robotic outfit against a rotating, Star Wars–themed background:

You can’t rhyme against the dark side of the force.

Why even bother?

So many dudes been with your mom

Who even knows if I’m your father?

A Celebration of Pop Culture

This crude, reality-crashing battle between evil and evil is a brilliant use of our cultural moment.

In modern Western culture, decimated as it is by more than a century of coercive government schooling, Hitler and Lincoln and Napoleon all have about the same presence in most human minds as do Darth Vader and Chuck Norris and Hulk Hogan.

In fact, if you go through each of the 25 epic rap battles between various figures both historical and fictional, you’ll see that the lyrics about politicians and warlords (Barack Obama, Genghis Khan) are usually much less detailed than the intricate inside jokes about pop-culture icons (Steve Jobs, Captain Kirk).

The mass of people have been turned off of history by its bland treatment in the schools. Instead, they’ve turned their attention to the details of invention and entertainment in the free market.

High-Octane Consumer Sovereignty

People want epic rap battles, so infrastructure has leapt up to support them. The first few battles, from fall 2010, have decidedly low production values. Vader’s outfit is baggy. In a later video, Chuck Norris’s beard looks like it’s cut from a stiff old wig. And many of the early lyrics waver from satirical genius to irrelevant crudity.

But by the fifth video, Ahlquist and Shukoff got themselves a new partner, Maker Studios. Maker, starting with a $100,000 grant from YouTube in early 2011, is now YouTube’s biggest production company. They manage a stable of artists with a total of more than 90 million subscribers. (And they’ve just signed that inscrutable mainstream rap mogul, Snoop Dogg.)

Maker has it all — producers, writers, video editors, makeup artists, and prop handlers. But where did these people come from? How did they know they should devote their day to improving the lyrics of a rap battle between, for instance, Sarah Palin and Lady Gaga?

It’s easy. The profit signal summoned them all.

Advertisers see that these YouTubers can bring steady, loyal traffic, and so they’re jumping at the chance to pay Maker Studios for these new, zany forms of art.

Unlike many older media companies, which have struggled to adapt to the Internet, Maker is run by people who understand the culture of YouTube inside out. Its founders include some of the earliest YouTube stars: Lisa Donovan and Shay Butler.

Maker’s success is based on its intimate understanding of the medium. They know that what creates viewer loyalty in the new media is engagement. Viewers don’t want to watch passively; they want to take part in a community project.

Every Epic Rap Battle ends with Shukoff shouting, “Who won? Who’s next? You decide!” Viewers leave their suggestions in the comments, and Shukoff and Ahlquist promise that they create all the new battles from those suggestions. That sense of connection with the artists — that sense of involvement in a shared conversation — keeps their fans coming back again and again.

If some fan makes a suggestion, then he feels emotionally invested in the project: he’s more likely to share the video on Facebook, Twitter, his own blog, etc. — if only to get people to see and support his own suggestion.

The old Hollywood corporations, monopolistic dodoes all, are falling behind on YouTube because they are built on one-way communication with viewers: Hollywood makes it. You watch it. And if you make a video parody of it, Hollywood reserves the right to sue you.[1]

But capitalism rewards the early adopters — entrepreneurs like the people at Maker. Capitalism gives strength to those who take risks, those who see new opportunities in social and technological conditions, and those who find ways to please the consumers faster and more fully.

The wild young upstarts threaten to overthrow the calcified old giants every day. Who wins? Who will be next? The consumers decide.

Working with What We’ve Got

The haphazard assembly of fictionalized factoids in each epic rap battle may seem deplorably vacuous. But, as Mises makes perfectly clear in The Anti-Capitalistic Mentality, it’s not the fault of the free market that millions of people like profane rap battles between caricatures of pop stars. All the market does is satisfy those tastes.

If Exodus and The Iliad were still central parts of our culture, entertainment entrepreneurs like Shukoff and Ahlquist would be working out the lyrics for a battle between Moses and Achilles.

The truth is that the insatiable behemoth of public schooling has crowded out (or beaten down) the tellers of ancient stories in almost every society on the globe. Whole generations have lost their narrative foundation.

But culture abhors a vacuum. If you take our stories away from us in the schools, we’ll just create new ones in the market. If you block us with intellectual-property laws one way, we’ll find another.

We Austrians and libertarians might do well to take a page from gleeful pop-culture innovators like Shukoff and Ahlquist. Indeed, the biggest Austrian Internet sensation of all time is itself a rap battle — the one between Keynes and Hayek.

To keep popularizing our ideas more and more, we will need to keep pursuing media innovation. We need what those YouTube moguls call engagement.

So tell us in the comments: Who are the most exciting libertarians in the new media? Who are the young musicians and comics and artists changing the way we communicate about freedom? Who should we be subscribing to on YouTube right now?